Correction Appended
Dartmouth-Hitchock Medical Center has adopted cost-saving measures to reduce the projected budget shortfall of between $6 and $13 million on its 2010 fiscal year, according to DHMC media relations manager Rick Adams.
The operating margin the budget remaining after expected expenses are subtracted from the hospital's revenue was found to be smaller than projected during the 2010 fiscal year budget, which ends Sept. 30, Adams said. Money from the operating margin goes towards new initiatives and covers unexpected costs at the hospital, he said.
"We're trying to head [the budget shortfall] off and there are a number of steps we announced in June to try and reign things in," Adams said.
DHMC implemented several cost-saving measures at the beginning of the fourth fiscal quarter, which began three weeks ago, according to Adams.
The hospital has frozen the wage increase program that usually occurs each summer until the beginning of the next fiscal year, he said. Adams said he expects that this will save the hospital roughly $6.1 million this year.
To further curb spending, the hospital will suspend "earn-time benefits" benefits that go toward paid leave for a two-week period starting Sept. 10, according to Adams. Employees accrue between 10 and 13.5 hours each two-week pay period based on their tenure, and the suspension of these benefits is estimated to save $1.5 million, Adams said.
DHMC is also reevaluating whether certain open positions at the hospital can be eliminated, and no new consulting positions will be filled or created, Adams said.
The hospital will also seek to limit discretionary spending costs and business travel, he said, although the savings from these measures have not been determined yet.
Additionally, DHMC will reexamine planned capital expenditures and will try to defer some projects if possible, Adams said.
"We think that those two steps are going to get us half-way there," he said.
The economic crisis did not initially affect DHMC to the same extent as it affected the College and other affiliated institutions, The Dartmouth previously reported.
Roughly 1 percent decline in surgeries and appointments, however, contributed to the recent budget shortfall, Adams said. Medicaid reimbursements for patient care were also $10 million lower than previous years, which may be due to New Hampshire budget issues, he said.
The administration also gathered staff feedback for alternative ways to cut costs, Adams said. In response to a suggestion to reduce printing costs at the hospital, DHMC made its internal newspaper available online instead of in print, he said, adding that sustainability and energy efficiency will continue to be a part of cost-saving measures.
None of the changes will negatively affect patient experiences at DHMC, Adams said.
"Ultimately our goal is to make sure our patients get the best care," he said.
While staff members have expressed disappointment about some of the changes particularly the loss of earn-benefits vacation time employees have generally been "understanding," Adams said.
